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National and Global Economies

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How can economies work for everyone?

A recent populist wave has led nations to rethink and sometimes reshape economic and trade policies. Our scholars are researching the issues that underlie these historic shifts—economic growth and income inequality, financial system stability and regulation, the impact of globalism—and helping to find new policy solutions.

Income inequality is not inevitable, says Nobel Prize-winning professor Joseph Stiglitz. An increasingly vocal critic of inequality, Stiglitz challenges the policies and politics that have fostered polarization and division around the world.

Unemployment has fallen steadily in recent years, but the average worker’s pay has barely kept pace with inflation. Some economists point to the decline of labor unions or the low-wage jobs, but Professor Suresh Naidu has a different theory.

Naidu (and co-authors) argue that corporate mergers have diminished workers’ bargaining power. “More and more Americans work in labor markets where there are one or two big employers,” says Naidu. If employees aren’t willing to uproot their families and relocate, then companies have more leverage to suppress their wages.

The U.S. labor market doesn’t function on autopilot, Naidu says. “Our research shows that the labor market is deeply uncompetitive at its core, and that something needs to be done to make it work better.”

Setting monetary policy and maintaining financial stability of the world’s largest economy

A professor at Columbia since 1988, Clarida exemplifies the remarkable expertise and engagement of SIPA faculty. In addition to teaching SIPA students, publishing new research on monetary policy, interest and exchange rates rates, and international capital flows, he has long been a global strategic advisor at the private investment firm Pimco, and also served as a deputy secretary in the Treasury Department.

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